Tuesday, September 10th, 2019


Trump’s approval rating sinks amid worry over economy, poll finds

WASHINGTON, Sept 10 — US President Donald Trump’s approval rating has dropped sharply amid growing public concern about the prospects of a recession, according to a Washington Post/ABC poll published today. The health of the US economy is one of…

Scourge of US tech Vestager promoted in new EU top team

BRUSSELS, Sept 10 — European competition chief Margrethe Vestager, whose tough line with US tech giants has enraged Washington, won a strengthened role in the incoming EU Commission today. Unveiling her top team, new European Commission president…

US stocks retreat ahead of central bank announcements

NEW YORK, Sept 10 — Wall Street stocks fell early today, with consumer and technology shares especially weak ahead of key monetary policy decisions. Worries about global economic growth have raised expectations for more central bank easing. The…

Boeing doesn’t expect testing issue to delay 777X

NEW YORK, Sept 10 — Boeing said today it does not expect a problem that came up during testing of its new long-haul 777X aircraft to significantly affect aircraft design or timetable. Boeing did not disclose details about the problem. A source…

Huawei drops lawsuit against US govt over seized equipment

HONG KONG/WASHINGTON: China’s Huawei Technologies Co Ltd has dropped a lawsuit against the US government after Washington released telecommunications equipment it had seized on suspicion of violations of export controls, according to a court filing on Monday.

Huawei, which has been placed on a US trade blacklist since May, had sued the Commerce Department and other US government agencies for seizing its equipment in Alaska in 2017 en route back to China after a lab test in California.

Huawei said the US government returned the equipment in August after confirming no export licence was required and it decided to drop the suit. It said the company was disappointed the US government refused to provide a full explanation of what Huawei calls “arbitrary and unlawful” detention of the equipment for two years.

The fate of Huawei, the world’s largest telecommunications equipment maker and a national icon in China, has become crucial in an escalating trade war between Beijing and Washington.

Huawei still faces multiple criminal charges in the United States for allegedly breaking US export sanctions to countries including Iran. It is trying to challenge its addition to the US National Defense Authorization Act in an ongoing lawsuit, which it says had restricted its business in the United States “unconstitutionally”.

Washington says the Chinese company’s telecoms gear could be used by Beijing to spy, an allegation Huawei has denied.

The Trump administration added Huawei to the so-called entity list in May, barring it from buying needed US parts and components without US government approval and threatening to disrupt its operations. – Reuters

Axiata, Digi lose more than RM9b in market value on news merger talks terminated

PETALING JAYA: Shares of Axiata Group Bhd and Digi.com Bhd saw heavy sell-off today after the termination of merger talks to create the largest telco player in the region.

Axiata was the top loser on Bursa Malaysia today, with its share price plunging as much as 87 sen or 17.8% to RM4.01 before closing 77 sen or 15.8% lower at RM4.11 on 41.06 million shares done, wiping off RM7.03 billion in its market capitalisation.

Digi, meanwhile, sank as much as 59 sen or 12.1% to RM4.30. At market close, it was down 29 sen or 5.9% to RM4.60 with 18.22 million shares changing hands. A total of RM2.26 billion of the telco’s market capitalisation was shaved off.

Last Friday, Axiata and Digi’s parent company Telenor ASA announced that they had ended four-month long discussions on a possible merger for the two telcos’ operations in Asia, due to some “complexities” involved in the proposed transaction. However, both parties do not rule out the possibility of a future transaction.

With the latest development, Affin Hwang Capital projected that in the absence of merger & acquisition (M&A) driven growth, Digi’s long-term growth rate to be similar to Maxis’ at 1% from 1.5%, previously.

As for Axiata, the research house expects the group to trade at a discount with a lower EV (enterprise value)/ebitda (earn-ings before interest, taxes, depreciation and amortisation) multiple of 10 times for Celcom from 12 times.

“Without a business combination, we expect Celcom’s business performance to continue to lag Maxis and Digi and hence, the lower valuation multiple,” it said in a report today.

AmInvestment Bank Research expects a re-emergence of mobile wars from the failed merger.

“Competition will remain just as intense as over the past four years, we expect continuing pressure on ARPU (average revenue per user) and subscriber trajectory, even though 2Q19 subscribers have recently flipped to a net sequential accretion of 77,000 after four years of continuous contractions,” it said.

Hong Leong Investment Bank Research also shared the view that competition intensity to remain with the five mobile network operators.

“Besides that, rivalry will also be focused on spectrum allocation, particularly on the prized 700MHz as MCMC intends to split it only into 4 blocks of 2×10MHz.”

It said Axiata will revisit telecom infrastructure services subsidiary edotco’s monetisation plan, and did not rule out other avenues and options for the group’s digital businesses, besides an initial public offering.

MIDF Research is of the view that mobile services providers would need to continue to provide attraction service value proposition to retain their respective market share.

The research house said this would mean a dilution in profit margin, and having an effective cost management strategy in place is essential to defend the profit margin.

Meanwhile, PublicInvest Research is maintaining its “neutral” rating on Digi but is downgrading Axiata to “trading sell” from “neutral” as its RM4.00 valuation implies a downside potential of 18%.

Amazon.com brings Prime service to Brazil; local retail shares drop

SAO PAULO, Sept 10 — Amazon.com Inc said today it will launch its Prime subscription service in Brazil, where it has struggled against tough local competition in Latin America’s largest economy. Shares in Brazilian retailers tumbled after Amazon…

Palm oil stocks down 5.3% last month

KUALA LUMPUR: Malaysia’s total palm oil stocks fell 5.31% to 2.25 million tonnes in August 2019 from 2.38 million tonnes recorded in the previous month, according to the Malaysian Palm Oil Board (MPOB).

In a statement today, MPOB said crude palm oil (CPO) stocks decreased by 3.55% to 1.29 million tonnes from 1.34 million tonnes while processed palm oil stock decreased by 7.57% to 961,266 tonnes from 1.04 million tonnes previously.

It also said CPO production rose 4.64% to 1.82 million tonnes versus 1.74 million tonnes in July.

Palm kernel output was higher by 8.31% at 446,625 tonnes from 412,353 tonnes.

Palm oil exports increased by 16.37% to 1.73 million tonnes from 1.49 million tonnes in July, while exports of oleochemical rose 4.57% to 302,011 tonnes against last month’s 288,802 tonnes.

Biodiesel exports in the month under review decreased by 40.43% to 47,012 tonnes from 78,920 tonnes, while exports of palm kernel cake decreased 34.06% to 144,090 tonnes from 218,501 tonnes.

Meanwhile, palm kernel oil exports slightly decreased by 0.19% in August 2019 to 86,696 tonnes vis-a-vis 86,865 tonnes in the preceding month. – Bernama

EU competition chief Vestager gains power in new Commission

BRUSSELS, Sept 10 — European competition chief Margrethe Vestager, whose tough line with US tech giants has enraged Washington, won a strengthened role in the incoming EU Commission today. Unveiling her top team, new European Commission president…

MAHB: August passenger movements up 7.5%

PETALING JAYA: Malaysia Airports Holdings Bhd (MAHB) reported 12.7 million passenger movements across its network of airports in August, representing a 7.5% year-on-yearincrease from the same month of the previous year.

“The 12.7million passenger movements was the highest handled for a month to-date and the 7.5% growth recorded for August was also the highest increase recorded to-date for this year,” the airport operator said in a filing with Bursa Malaysia today.

MAHB noted that the international passenger movement rose 7% yoy to 6 million, while domestic passenger movement grew 7.9% to 6.6 million.

Meanwhile, airports in Malaysia registered 9.2 million passenger movements in August 2019, a 9.2% growth over August 2018. International and domestic sectors recorded 4.6 million and 4.7 million passengers with 4.0% and 14.8% expansion respectively.

Overall, aircraft movements increased 4.5% with international and domestic aircraft movements registered an increase of 4.9% and 4.3% respectively over August 2018.